• Fino gets RBI’s first-ever in-principle approval to convert into a Small Finance Bank
• Move will allow Fino to accept bigger deposits and start lending
• Approval comes two years after Fino applied under RBI’s “on-tap” SFB licensing

Fino Payments Bank has received an in-principle approval from the Reserve Bank of India (RBI) to convert into a Small Finance Bank (SFB), becoming the first payments bank in the country to achieve this milestone. The approval marks a major shift for Fino, which began operations in 2017 and has now completed the five-year requirement to apply for SFB status.

The transition will allow Fino to offer a wider range of financial services, including larger deposit accounts, loans, and credit products for individuals and small businesses. These services are currently restricted for payments banks. With SFB status, Fino can expand its customer offerings and strengthen its presence across the country.

The RBI said Fino’s application was evaluated under its 'on-tap' licensing guidelines, which allow eligible payments banks controlled by Indian residents to apply for conversion after completing five years of operations. Under SFB rules, at least 25% of branches must be opened in unbanked rural areas.

Rishi Gupta, MD & CEO of Fino Payments Bank, said the approval reflects the company’s strong performance and its ability to deliver tech-driven banking at scale. He added that Fino aims to start its lending business within a year of receiving the approval.

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Ahead of the transition, Fino has been upgrading systems, processes, and teams to meet SFB requirements. The company currently serves over 16 million customers through more than two million merchants and covers 97% of India’s pincodes. As of September 2025, its deposit base stood at over Rs 2,300 crore.

Once operational, Fino will join 11 existing SFBs, including AU, Ujjivan, Equitas, and Jana.